Cultured mouse fibroblasts which are malignantly transformed or treated with TPA or growth factors such as PDGF synthesize and secrete the 39,000 Mr precursor to cathepsin L in large amounts. This purified procathepsin L, originally called MEP for major excreted protein, contains mannose 6-phosphate, the lysosomal recognition marker. It is processed intracellularly in both transformed and nontransformed cells to give two specific lower molecular weight forms with a lysosomal localization. Overproduction of cloned cathepsin L in a nontransformed cell results in secretion of this lysosomal enzyme. Secreted procathepsin L can bind to the mannose 6-phosphate receptor of many cells and be endocytosed and processed intracellularly. In antigen presenting cells, procathepsin L uptake reduces the efficiency of antigen presentation, thereby interfering with immune response. Transformation, TPA and PDGF stimulate procathepsin L synthesis by increasing levels of procathepsin L specific mRNA transcription. We have cloned a functional procathepsin L gene from the mouse and have identified and sequenced the 5' flanking region which acts as a promoter in CAT constructions. A human procathepsin L cDNA has also been cloned and sequenced. Human procathepsin L mRNA has been detected in all normal human tissues analyzed with highest levels in liver, spleen, kidney, and many malignant tumors. Recombinant human procathepsin L produced in bacteria is enzymatically active.